Higher oil prices have increased the appeal of other sources of energy

World demand for oil is set to increase 37% by 2030, according to the US-based Energy Information Administration's (EIA) annual report.

Demand will hit 118 million barrels per day (bpd) from today's existing 86 million barrels, driven in large part by transport needs, the EIA said.

But oil cartel Opec's supply share will fall from 39.7% to 38.4% as West Africa and the Caspian increase production.

Higher demand is expected to come from Asia, especially India and China.

Rising prices

At the same time, oil production in Europe's largest producer, Norway, is expected to decline from this year's 3.6 million bpd to 2.5 million bpd by 2030.

"Much of the world's incremental oil demand is projected for use in the transportation sector, where there are few competitive alternatives to petroleum," said the EIA, the statistics arm of the US Department of Energy.

The US will still be the single largest consumer of petrol, with the EIA predicting it will consume 27.6 million bpd, up from this year's 20.8 million.

Though worldwide oil demand is forecast to increase, the higher price is expected to temper demand and boost the appeal of other sources of energy, such as coal, gas and renewable fuels.

Oil represented nearly 38% of the world's total energy consumption in 2003, but is expected to fall to 33% by 2030.

Oil prices hovered near the $70 mark on Tuesday, with crude oil hitting $68.57 and Brent light oil at $69.40 at 1655 BST, having traded higher earlier in the day.